Forums: Discussions for entrepreneurs and small business.

I think what the original post is talking about is the difference between the small business owner and the entrepreneur.

Joseph Schumpeter defined entrepreneurship:

to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way,  by opening up anew source of supply of materials or a new outlet for products . . . . Entrepreneurship, as defined, essentially consists in doing things that are not generally done in the ordinary course of business routine.

In casual conversation, the terms “small business owner” and “entrepreneur” are often used as if they were the same thing. According to the more narrow definition put forward by Schumpeter, they are something quite different.

The entrepreneur is seeking to disrupt the ordinary way of doing things through innovation, technology, new combinations of assets and new ways of doing business. This is a risky undertaking and therefore the business must scale to generate the returns necessary to justify the risk. These are the opportunities that attract venture capital because of the size of the potential market and the speed at which the business will scale up.

Small business owners start businesses to satisfy a variety of personal and financial goals. They are generally not willing to take on the same level of risk as the entrepreneur so they follow more traditional business models. Franchises are popular partly because they are a proven model which helps reduce risk.

Society needs both small business owners and entrepreneurs. One isn’t better than another. I think it is important to understand the difference because each path has different challenges.

I agree with you 'startuphelper,' when you say that most people just want to start their own business to be their own boss, and that most people are not interested in being the next Fortune 500 company.  This all describes my situation.  The business that I want to start is one that I am hoping that just my husband and I will be able to run- and maybe hire 1-2 people later, depending on how well we do.

I agree with the first post. Thanks for sharing!

NAPW

This is a great topic that I am very passionate about.

Most people do not understand the difference between a business and "jobness" (my word for a job disguised as a business; a one- or few person business totally dependent on the person running it).  They believe they will be their own boss, do more of what they love, work less hours, but this a myth, not a reality.  It is also why the greater majority fail over the course of the first few years and why most "entrepreneurs" earn less and work more hours than if they were to work for someone else.

Many people are afraid to think big or lack the critical understanding of what it takes to scale a business. Michael E. Gerber (author of the E-Myth Revisited) has a new book called (ironically) the Most Successful Small Business in the World- the 10 Principles- talking about how to think big even when you start small.  I did an interview with him on this subject recently you may be interested in that covers the points above and more:  http://www.carolroth.com/unsolicited-business-advice/?p=544

Carol Roth

CarolRoth.com

Every start up business is small, so unless you have big money, most will not start a large business

For those interested in unique ideas for a new business start-up, may I suggest the site: SmarterLeap.com

All ideas are 100% original and pre-screend for things like revenue, profitability, market size, etc.